Concerns over the competition impact on the single-aisle aircraft market have spurred the European Commission to open an in-depth investigation into the planned tie-up between Boeing and Embraer. The regulator says it will particularly examine the situation in the 100- to 150-seat sector – in which the two airframers have "to a certain extent" aircraft types which address the same market. Boeing offers the 737 family in the single-aisle category while Embraer has the E-Jets, with both airframers having re-engined versions. The Commission says that while the US and Brazilian manufacturers both compete with Airbus – which has the A320 family and A220 in this sector – they "also seem to engage in head-to-head competitions". It also suggests Embraer has an influence over the broader single-aisle market, above 150 seats.
"Despite Embraer's comparatively small market share it…seems to exert some price constraint on the market leaders," says the Commission. "The transaction may therefore eliminate a small but important competitive force in the concentrated overall single-aisle market," it adds. Single-aisle types from Russia, China and Japan – including the Irkut MC-21, Comac C919 and Mitsubishi MRJ – face high entry barriers and these airframers are unlikely to replicate the "competitive constraint" which Embraer can flex, the Commission states. "With our in-depth investigation, we want to make sure that mergers in commercial aircraft do not significantly reduce effective competition on prices and product development," says European competition commissioner Margrethe Vestager. Boeing and Embraer have decided not to submit commitments during the initial investigation to address the preliminary concerns, says the Commission. It says it has 90 working days – until 20 February 2020 – to reach a decision.

Source: FlightGlobal

The Southwest Airlines Pilots Association (SWAPA) on 7 October announced it filed a lawsuit against Boeing seeking damages for the 10,000 pilots represented by the association who have lost compensation since the grounding of Boeing 737 Max in March 2019. The lawsuit filed in the District Court of Dallas County, Texas, where Southwest Airlines is based, alleges that Boeing deliberately misled the airline and its pilots that 737 Max aircraft were airworthy and not significantly different from the previous generation 737NG aircraft. The full complaint is available online. "Our pilots should not be expected to take a significant and ever-expanding financial loss as a result of Boeing's negligence," SWAPA says. "We look forward to a solution that helps Boeing restore the confidence of both the flying public and the pilots who operate its aircraft." Boeing is negotiating with airlines about how to compensate them for the aircraft grounding. "Boeing has the greatest respect for the men and women who fly for Southwest Airlines," the airframer says in a statement. "We are aware that their pilot union, SWAPA, has filed a lawsuit against Boeing related to the 737 MAX suspension of operations. We believe this lawsuit is meritless and will vigorously defend against it." Southwest Airlines had the largest 737 Max fleet in service out of any airline when regulators worldwide grounded the aircraft in March, with a total of 34 aircraft from that type, Cirium's Fleets Analyzer shows. It also has 234 Max 8 series aircraft on order from Boeing, along with 28 Max 7 aircraft. The Dallas-based airline has removed Max aircraft from its flight schedules through 6 January, Investigations have suggested a central factor in the fatal crashes was the manoeuvring characteristics augmentation system (MCAS) flight control software created for Max aircraft by Boeing to make the aircraft fly and respond similarly to 737NG aircraft despite different engines added to Max series aircraft. Boeing is coordinating with the US Federal Aviation Administration on flight tests of modified Max aircraft. The airframer expects Max aircraft will be deemed safe to return to service during the fourth quarter of 2019. The lawsuit alleges that Boeing rushed certification under the same aircraft type certificate as NG aircraft. Boeing’s false representations about safety made directly to SWAPA, the lawsuit adds, caused the association to agree to include the 737 Max as a term in its collective bargaining agreement with Southwest "despite its initial reluctance". "Boeing made a calculated decision to rush a re-engined aircraft to market to secure its single-aisle market share and prioritize its bottom line," according to the lawsuit. "In doing so, Boeing abandoned sound design and engineering practices, withheld safety critical information from regulators and deliberately mislead its customers, pilots and the public about the true scope of design changes to the 737 Max." Russian aircraft lessor Avia Capital Services made similar allegations in its lawsuit against Boeing, which it filed in August in Cook County, Illinois, which is the jurisdiction of Boeing's Chicago headquarters. The lessor is seeking at least $115 million, alleging that the airframer deceptively sold 737 Max aircraft on the premise that the aircraft were properly certificated, and that pilots would not need months of additional training. Boeing and the FAA are facing scrutiny about not informing pilots about the risks of the automated flight control software on Max aircraft or requiring additional training before clearing them to operate the Max. The US National Transportation Safety Board published a report in September urging the FAA to develop broad standards to make cockpit alerts clearer and to help pilots better prioritise cockpit warnings. NTSB chairman Robert Sumwalt in the report stated pilots of the two doomed Max aircraft flights "did not react in the ways Boeing and the FAA assumed they would" to the automated MCAS software.

Source: FlightGlobal

Peruvian Airlines has suspended all flights and closed offices until further notice due to a “lack of liquidity”, it says in a statement on its website on 4 October. Peru’s second-largest carrier posted a notice on Friday announcing the cancellation of all flights from Lima until further notice. The move comes after government authorities impounded the airline’s bank accounts earlier in the week. The airline says in its statement, translated from Spanish, that the bank's action caused a liquidity shortage that affected all operations. It adds it could not recover from the situation and was forced to suspend all flights until further notice. On 30 September, Peruvian said it had been forced to stop flying for half a day as a consequence of being unable to pay fuel providers. It attributed the cash shortage to a fiscal court's order blocking access to its monetary assets. Peruvian adds in the statement on Friday that it is stepping up efforts to find new investors in order to re-float the company.

Source: FlightGlobal